Earnings Release:
July 26, 1999 18:33
AppNet Announces 65% Revenue Growth for Second Quarter; Organic Growth Drives Strong Quarterly Performance
BETHESDA, MD--(BUSINESS WIRE)--July 26, 1999--AppNet (Nasdaq: APNT), the premier provider of end-to-end e-business solutions, today announced strong second quarter financial results for 1999. For the three months ending June 30, 1999, revenues were $25.1 million, a 65% increase over pro forma revenue of $15.2 million for the second quarter of 1998. Gross margins were 43.3% for the second quarter of 1999 versus 39.5% for the second quarter of 1998 on a pro forma basis. Adjusted earnings before interest, taxes, depreciation, and amortization were $1.3 million for the quarter ended June 30, 1999 or 5.2% of revenue.
"This excellent financial performance is a result of organic growth and demonstrates our growing momentum in the e-business solutions market," said Ken Bajaj, CEO of AppNet. "The business community is responding to our end-to-end e-business model that integrates strategy consulting, interactive marketing, and Internet technologies - all available from a single partner. We are seeing an increase in engagements with customers who want all of our e-business services to leverage the Internet's competitive advantages to reduce time to market, to gain competitive advantage, to increase revenues, and to drive productivity."
Specific highlights of the quarter include:
o Revenues were up 13% sequentially from the first quarter of this year on a pro forma basis, $25.1 million compared to $22.3 million.
o The company signed several multi-million dollar contracts with
both large Fortune 50 and Internet-based "dot-com" customers.
o Gross margin was 43.3%, which represented an improvement over the pro forma gross margin for the first quarter of 1999, which was
41.0%.
o Adjusted EBITDA was 5.2% of revenue for the second quarter
compared to 1.7% of revenue on a pro forma basis for the first
quarter of this year.
"In the second quarter we closed a number of multi-million dollar engagements as we continue to increase the size of the average project we conduct with each client," added Mr. Bajaj. "We are working with both dot-com companies like Value America as well as large multi-nationals like Ford." Other recent highlights include:
o More customers are signing engagements to implement complete
online businesses.
o AppNet formally launched its transaction-based outsourcing service, called outsourcEC, where the company designs, hosts, operates, and maintains commerce-enabled web sites for their customers. Notable customers who began using the outsourcing service in the second quarter include the WeddingChannel.com, Burton Snowboards, and The National Oceanic and Atmospheric Agency.
o AppNet recently launched an image awareness campaign that will
incorporate both print and interactive media. The campaign will target CEOs, CIOs, and marketing and operational executives of Fortune 1000 and "dot-com" companies to increase its awareness within its target market place.
Mr. Bajaj concluded: "This strong quarterly performance confirms AppNet's leadership position in the booming e-business market. We are delivering comprehensive e-business solutions that integrate both customer-facing storefronts as well as supplier-facing back-office systems through the power of the Internet."
AppNet (Nasdaq: APNT) is the premier provider of end-to-end e-business solutions. AppNet doesn't over-emphasize any one e-business discipline, but understands that interactive marketing is just as important as back-end office integration. AppNet combines strategic consulting, interactive media services, back office systems integration, and e-commerce outsourcing into powerful e-business solutions for Fortune 1000 and "dot-com" companies. Customers include Baxter Healthcare, Ciena, Dial, Ford, GeoCities, Hyundai, K*B Toys, NEC, Norwest, and Unilever. Find more information about AppNet at appnet.com.
This press release may include "forward-looking statements" for purposes of the Securities Exchange Act of 1934. All statements herein, other than those of historical fact, including statements regarding future financial position, budgets, projected costs, and plans and objectives of management are forward-looking. Actual results or events may differ materially from those projected in such forward-looking statements. Information regarding the factors that could cause such differences are contained in the Company's Prospectus dated June 17, 1999 contained in the Registration Statement on Form S-1 filed in connection with the Company's initial public offering.
AppNet, Inc. (Amounts in thousands, except per share data)
Three months Three months Three months
ended ended ended
June 30, 1998 March 31, 1999 June 30, 1999
Pro Forma (a) Pro Forma (a) Actual(c)(d)
(Unaudited) (Unaudited) (Unaudited)
Revenues $15,198 $22,271 $25,063
Cost of revenues 9,197 13,132 14,220
Gross profit 6,001 9,139 10,843
Selling and marketing expense 682 1,353 1,594
General and
administrative expense 4,057 7,402 7,957
Adjusted EBITDA (b) 1,262 384 1,292
Stock-based and other
acquisition-related
compensation expense (c) 4,162 2,560 3,010
Depreciation and
amortization expense 14,974 12,847 15,104
Loss from operations (17,874) (15,023) (16,822)
Interest expense (d) 1,478 1,476 1,427
Other expense, net 277 - 558
Loss before income taxes (19,629) (16,499) (18,807)
Income taxes 64 100 50
Net loss $(19,693) $(16,599) $(18,857)
Dividends on and
accretion of preferred stock (855) (1,132) (1,100)
Net loss attributable
to common stockholders $(20,548) $(17,731) $ (19,957)
Basic and diluted net loss
per common share $(1.12) $(0.87) $(0.92)
Weighted avg. common
shares outstanding 18,369 20,285 21,580
(a) Pro forma results of operations for the three months ended June
30, 1998 and the three months ended March 31, 1999 give effect to
the acquisitions we made in 1998 and 1999 and GTCR's investment
in AppNet as if these transactions had occurred on January 1, 1998. The pro forma results of operations are not adjusted to reflect certain financing transactions related to our initial public offering.
(b) Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortization and other expenses and stock-based
and other acquisition-related compensation.
(c) Excludes a one-time compensation charge of $2.5 million for the
three months ended June 30, 1999 that was incurred in connection
with the initial public offering.
(d) Excludes a one-time interest charge of $1.1 million for the three
months ended June 30, 1999 related to beneficial conversion
rights of certain convertible notes.
CONTACT: Media: John Berry
VP, Marketing , AppNet
301/581-1279
john.berry@appnet.com
or
Investors:Jack Pearlstein
CFO, AppNet
301/581-2490
jack.pearlstein@appnet.com |
